Whether your clients process payments or store sensitive customer information, chances are cyber criminals have already placed a target on their organization. Making matters worse, when cyber attacks occur, they can have devastating financial consequences.
Cyber security breaches cost Canadian companies more than $9.6 billion last year, according to the 2019 Scalar Security Study. Furthermore, the study found the average cost to recover from a data breach was, on average, $3.7 million for individual companies. These expenses came in the form of lost revenue, business disruptions and direct dollars addressing the breach.
Fortunately, there are steps you can take as a broker to help your clients manage their exposures.
Understanding Cyber Attacks
Cyber attacks can come in many forms, and even something as simple as an email attachment can put your clients’ data in jeopardy. Security breaches involving phishing attacks, ransomware, credential stuffing, malware and distributed denial-of-service attacks are only becoming more common, putting businesses of all sizes in the line of fire.
With the click of a mouse, hackers can gain access to your clients’ systems, stealing important financial information, corrupting data or causing long-term disruptions. As such, tailored cyber liability insurance is a crucial component to your clients’ risk management programs.
Protecting Your Clients from Cyber Attacks
There are many ways to protect clients from a cyber attack, but it all begins with providing cyber insurance coverage. Although cyber insurance is a relatively new type of coverage, the market is expanding rapidly.
According to a report from Allied Market Research, the global cyber insurance market is predicted to grow to $14 billion by 2022. By establishing yourself as a cyber security expert now, you can take advantage of this growing market and provide greater value to your clients. A cyber liability policy can cover vast exposures, ranging from the content on a website to sensitive data stored on a computer network. In fact, these policies can offer your clients a number of unique benefits:
- Loss mitigation services — While many people think cyber liability policies only help organizations respond and recover from a breach, the right coverage can also offer proactive loss mitigation support. For instance, cyber liability insurance can provide exclusive access to software (e.g., antivirus programs and password generators) and services (e.g., online resources related to cyber security education) that businesses can leverage to identify and even mitigate key cyber exposures.
- Incident response support — Following a cyber incident, your clients will likely need to call in a variety of experts—experts who can help them assess any damages and provide critical breach response support. For instance, in the wake of a cyber incident, businesses often seek legal assistance. This assistance can be costly. Cyber liability insurance can help businesses afford proper legal work following a cyber attack. Policies can also provide your clients with direct access to forensic and incident response professionals who can help organizations evaluate the situation and follow the appropriate steps to contain a breach and notify affected parties.
- First-party coverage — There are a number of first-party costs associated with data breaches. Data recovery, cyber extortion and business interruptions expenses can add up quickly, often reaching six figures or more. Cyber liability policies can protect your clients from devastating financial harm, reimbursing them for costs associated with breach notification, security fixes, identity theft protection for those impacted by the breach, extortion, data recovery and lost revenue.
- Third-party coverage — Many people overlook the third-party exposures associated with a cyber attack. For instance, if an email sent from your client’s server has a virus that crashes the system of a customer, your client could be held liable for damages. In addition, if the software your client distributes fails, they could be held responsible for damages to a third-party system. Cyber liability policies can provide protection for these kinds of costs, reimbursing your clients for any defence costs, compliance-related fines or even media liability exposures related to defamation cases.
A cyber liability insurance policy is specifically designed to address the risks that come along with using technology—the kinds of risks that other types of business liability coverage won’t cover. Offering this policy to your clients can be the first step in protecting them and solidifying your position as a trusted advisor.
Want More Cyber Security Resources?
Broker Briefcase has the resources you need to educate your clients about their cyber security risks. Whether you’re looking for timely newsletters, exposure scorecards or cyber security guides, Broker Briefcase has everything you need to position yourself as a cyber security expert and protect your clients from emerging cyber threats.